Overnight Summary

Each Market In Focus

The heavily weighted mining and financial stocks gave up some of their strong gains of the week resulting in Australia’s equities benchmark being one of the few in Asia Pacific to trade lower. The S&P/ASX 200 finished down 0.4% at 5774.6, trimming the week’s gain to 2.8% and ending at the day’s low following a six-point adjustment lower. Materials dropped 0.9% in trading while financials lost 0.7%. But utilities advanced 0.4%. Individually, drugmaker Clinuvel jumped an additional 8.35% after the U.S. FDA granted priority review to a application for a treatment involving a rare genetic blood disorder.

The Dow Jones Industrial Average slipped but notched its biggest three-week gain since the period following the 2016 election, a dramatic bounceback from its late-December selloff. Investor appetite for stocks returned in recent trading sessions, boosted by a rebound in energy prices, data suggesting the U.S. economy is still growing, reassurances from the Federal Reserve that it will adjust its pace of tightening monetary policy if needed, as well as by hopes for progress in U.S.-China trade relations. The Dow industrials are up 10% since their Christmas Eve trough, rising 6.9% over the past three weeks. The blue-chip index slipped about 5.97 points, or less than 0.1%, to 23995.95 as falling energy prices dragged oil-and-gas companies lower, a reminder of how tenuous gains are when markets are choppy. The S&P 500 slipped 0.38 points, or less than 0.1%, to 2596.26. Energy companies in the index fell the most, down 0.6%, as the price of U.S.-traded crude oil fell for the first time in almost two weeks. The Nasdaq Composite declined 14.59 points, or 0.2%, to 6971.48.

Gold prices inched higher, lifted by declines in stocks and U.S. Treasury yields after data showed U.S. consumer prices fell in December and wages rose. Front-month gold for January delivery inched up 0.2% to $1,287.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices are near their highest level since June, lifted by a weaker dollar that has made gold cheaper for overseas buyers and market turbulence that has pushed some investors toward the haven asset. However, the gold rally has paused in recent sessions with stocks and Treasury yields rebounding from last week’s lows and some analysts more confident in the U.S. economy. Analysts said the muted inflation reading could reinforce that faith by fueling more bets that the Federal Reserve will be able to stay patient with interest rates.

Oil prices declined, ending a nine-session streak of increases as a retreat in U.S. stock markets reduced risk appetite and spurred profit-taking. But the U.S. crude-oil benchmark still ended the week nearly 8% higher, as production cuts by major producers, a weaker dollar and further export declines from sanctioned Iran buoy prices. West Texas Intermediate futures, the U.S. oil standard, ended 1.9% lower at $51.59 a barrel on the New York Mercantile Exchange. The decline was the first since late December and put an end to the longest upward streak in nine years. Brent crude, the global oil benchmark, ended 1.9% lower at $60.48 a barrel on London’s Intercontinental Exchange. Despite the modest retreat in prices, oil has made a sizable comeback from Dec. 24, when prices closed at an 18-month low of $42.53 a barrel.

The U.S. dollar flipped into positive territory against many of its rivals in the aftermath of December consumer-price inflation figures. One exception was the British pound, which defended its strength after U.K. newspaper The Evening Standard reported that a delay to the March 29 Brexit was becoming increasingly likely. The buck started the session on the back foot, but managed to climb after December consumer-price inflation data was released even though it showed CPI to drop for the first time in nine months on the back of lower gas prices. Still, the ICE U.S. Dollar Index moved up 0.1% to 95.624. Simultaneously to the greenback creeping higher, the euro gave up its gains, slipping to $1.1471, compared with $1.1500 late Thursday in New York. Earlier in the week, the shared eurozone currency reached a three-month high.

European shares closed only marginally higher after a downbeat start to trading on Wall Street. The Stoxx Europe 600 rose 0.09%, or 0.32 points, to 349.2, but the DAX dropped 0.3% and the CAC 40 fell 0.5% as the Dow Jones Industrial Average declined 59 points to 23942. “What had been shaping up to be a decent session unraveled as Friday went on, a negative start from the Dow Jones ensuring the European indices couldn’t recover their initial growth,” said Connor Campbell at Spreadex. “The ongoing U.S. government shutdown, as well as Starbucks-refreshed concerns surrounding the Chinese economy, contributed.”

Many Asian stock markets capped their best week in two months with another round of broad gains as the equities’ start-of-year rebound continued. Many indexes rose at least 0.4%, led by a 1% bounce in Japan after Thursday’s currency-fueled sharp underperformance. That market will be closed Monday for a holiday. The Philippines’ benchmark, meanwhile, fell 1%. The other decliner so far was India hit by a post-fiscal-third quarter drop in big-cap Tata Consultancy Services. Hong Kong’s Hang Seng advanced 0.4%. Indian shares edged lower as investors remained cautious on index heavyweight Tata Consultancy Services as well as a gaining streak in oil prices. The S&P BSE Sensex closed 0.3% lower at 36,009.84, but still eked out an 8% increase for the week.

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